Sunday, January 3, 2010

More on how diamonds are valued

Color: Diamonds come in colors including black. Most of the darker colors are used for industrial purposes and not for gems. The white-blue color of pure water is the most valued color for white diamonds and these are rated D-F. (There is no A-C on the scale.) As the diamond color progresses toward yellow (K-M) it becomes less valuable. Diamonds that have a noticeable yellow (N-R) to champagne color (S-Z), are the least valuable. Because the color can be influenced by the color of the gem's setting, the color is judged when the stone is unset.

To complicate matters and value, diamonds that come in colors, called fancies, are very rare and very valuable. Deep blue, red, and green diamonds are among the rarest and most valuable gems on earth.

Carat: Diamonds and other precious gems are valued on weight, or carats. A carat is 1/5 of a gram. Sometimes diamonds under a carat are valued in points. One carat is 100 points, so a quarter carat diamond can be referred to as 25 points. Diamonds are not valued on their apparent size, since the size can be either enhanced or diminished by the cut. And different gemstones have different densities. An emerald is lighter than a diamond and a ruby is heavier. A one carat diamond, one carat emerald, and one carat ruby would be three different sizes.

The more the diamond weighs the more valuable it is. The price of a diamond is based on carats, but the more the diamond weighs, the higher price it has per carat, all other things being equal, meaning the diamonds are the same in color, cut and clarity. In other words, a one carat diamond may be priced at $10,000 per carat, while a two carat diamond will be priced at $20,000 per carat. The one carat diamond costs $10,000 and the two carat diamond costs four times as much or $40,000. The discrepancy increases the higher the carat weight.

Diamonds of one carat or more can be graded by an independent lab as to the quality of the cut, weight, color and clarity. The certificate is often available at the diamond seller's.

When you're buying a diamond you can choose which factors are more important to you. If you want more carats, you can trade off clarity. If it's important the color is as close to pure white as possible, you can get a stone weighing less carats, or perhaps one that has a minor, but not visible to the naked eye imperfection.